Reviving the Administration: Bihar State, India, 2005-2009
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Rohan Mukherjee Innovations for Successful Societies REVIVING THE ADMINISTRATION: BIHAR STATE, INDIA, 2005-2009 SYNOPSIS Nitish Kumar was elected chief minister of Bihar, India’s poorest state, in December 2005, when the state’s government was weighed down by two decades of institutional decline. He inherited a paralyzed administration, an unmotivated bureaucracy and a state that could not adequately respond to the needs of its people. His program of administrative reforms loosened the political stranglehold on the bureaucracy, decentralized authority within administrative hierarchies and brought government closer to citizens. By 2009, Bihar was seen as a pioneer among Indian states in some areas of administrative reform, especially in improving government accountability by implementing citizens’ rights to information. Two separate memos, “Coalition Building in a Divided Society” and “Clearing the Jungle Raj,” describe Kumar’s efforts to build a coalition for reform and to improve law and order in Bihar, respectively. Rohan Mukherjee drafted this policy note on the basis of interviews conducted in Patna, Bihar, in July 2009. INTRODUCTION pundits and academic observers had all but Nitish Kumar won a historic election in written off Bihar as a lost cause when Kumar December 2005 to become Bihar’s chief minister. emerged as an unexpected winner in the state At that time, popular opinion held that the Indian election. Through a strong reform effort in state had reached such a low point that the administration, infrastructure, and law and order, situation could not get much worse. This he was able to turn Bihar around in a relatively sentiment buoyed the new chief minister’s reform short period. efforts, which followed a 15-year period of single- The government in Bihar lacked not only the party dominance that had earned Bihar the structural components of good governance but reputation in The Economist of being the also the basic elements of everyday administration. “armpit” of India.1 The previous regime was A financial scandal in the previous regime widely suspected of maladministration ranging involving billions of rupees embezzled from funds from nurturing criminal elements to siphoning for cattle fodder had constricted government billions of rupees from state coffers. Development decision making. The government was unable to © 2010, Trustees of Princeton University 1 Terms of use and citation format appear at the end of this document and at http://www.princeton.edu/successfulsocieties. Rohan Mukherjee Innovations for Successful Societies deploy resources in a timely or effective manner. caste groups that competed for access to state Centralized decision-making authority in the resources. With 16% of the population, Muslims administration complicated matters. Although a constituted a sizeable yet marginalized minority. six-month period of direct federal rule following Social discord and poor administration had an inconclusive state election result in February deprived Bihar of its human capital and 2005 helped Bihar decentralize some productive potential. Between 1991 and 1998, administrative decision-making authority, the real while economic reforms saw India’s economy impetus for reform arose out of Kumar’s victory in grow 6% annually, Bihar’s grew at a 2.7% rate.2 a second round of elections late that year. Bihar’s successful administrative reforms As chief minister, Kumar’s focus on were noteworthy for their simplicity. In technical administrative reform was threefold: first, to terms, the efforts highlight the effect that minor restore the physical infrastructure and procedural amendments to existing rules can have on an foundations of the state; second, to delegate entire administrative system. In strategic terms, authority within administrative hierarchies, they reiterate the importance of political backing particularly with regard to financial expenditures; and a political leader’s willingness to delegate and third, to bring government closer to the authority to a highly competent group of people. By 2009, accolades for Bihar’s handpicked senior aides. On a day-to-day level, administrative reforms poured in, and the the reform experience underlines the importance government of India conferred the National e- of building a foundation of basic functionality in Governance Award on the state for its innovative terms of the physical infrastructure and procedural approach to implementing federal legislation framework of administration, upon which a guaranteeing the right to information for every capable leadership can build more ambitious citizen. structures. Context THE CHALLENGE If one were to pour the populations of the In an unprecedented turn of events, state American states of California, Texas and New elections in February 2005 resulted in a hung York into the area occupied by the state of legislature in Bihar. No single political party or Indiana, one could approximate Bihar’s alliance of parties could claim the minimum demographic and geographic dimensions. number of legislators required to form the Combined with a per-capita income lower than government. As a result, the government of India countries such as Eritrea, Malawi, Ethiopia, and invoked a constitutional provision allowing direct Sierra Leone, Bihar’s challenges were great. Low federal rule, also known as “president’s rule,” for standards of service delivery, a lack of quality six months. Within that time Bihar had to gear human resources and widespread corruption at all up for another attempt at electing a viable levels of the bureaucracy complicated governance government. In June, as the state reeled under at an everyday level. A Maoist insurgency in the political uncertainty, the World Bank released a countryside challenged the legitimacy of the report on a development strategy for Bihar. The government and diminished its functional capacity report noted, “Most state governments are by systematically attacking government property characterized by poorly defined service norms, and personnel. On an operational level, social political interference, and a large non-meritocratic divisions along caste and religious lines hampered bureaucracy. Especially so in Bihar, this is public policies. The majority Hindu community compounded by a highly centralized was broadly divided into three politically salient administration with the kind of incentive structure © 2010, Trustees of Princeton University 2 Terms of use and citation format appear at the end of this document and at http://www.princeton.edu/successfulsocieties. Rohan Mukherjee Innovations for Successful Societies that thwarts decision making and can cause major was inundated with proposals from all corners of delays.”3 Chirashree Das Gupta of the Asian government for projects large and small. Even Development Research Institute, one of Bihar’s though funds were theoretically available at the leading think tanks, described the situation beginning of the financial year, often it would take similarly when interviewed about Bihar’s until the fourth quarter for the department to administration: “The institutional machinery of clear the backlog of proposals. The delay the government had gone into a kind of standstill compressed the implementation timeline for many because there was so much fear about spending projects into just a few months; little could be that expenditure levels went down. Nobody was done before the unspent budget allocation had to willing to take responsibility for a signature or a be returned to the relevant treasury. sanction.” A lack of talented people also posed a major The government’s decision-making paralysis challenge. Not only had Bihar witnessed a flight was rooted in fear that grew out of the of private capital during the preceding decades, it repercussions of the previous decade’s fodder was also the only Indian state to experience scam, the Bihar government’s longest-kept and negative net migration, i.e., more people had left most damaging secret, in which billions of rupees Bihar than entered it, as recorded by India’s 2001 were embezzled by successive administrations in census. Personnel shortages in key service sectors the name of fodder for nonexistent herds of cattle. had almost incapacitated the state. For example, When the scam became public in 1996, it brought no new teachers had been hired since 1993, and down the chief minister, Lalu Prasad Yadav, who the police force was functioning at about two- was forced to resign after being found complicit thirds of capacity. Quality was also a concern. by India’s Central Bureau of Investigation. Over the years, Bihar had experienced a classic Undeterred, Yadav went on to rule through his secession of the successful, as those with resources wife, who succeeded him as chief minister. When and education left the state. The impact was felt Yadav’s 15 years of direct and indirect rule ended, at the highest levels of the bureaucracy as well as the Bihar government was on its knees. among front-line staff in government Political interference in the administration departments. Senior officials would use their had eroded incentives for bureaucratic initiative connections to obtain central-government and innovation. Over the years, even though the postings in order to secure their own careers and federal government had steadily transferred more their families’ futures. Government employees and more funds to bolster Bihar’s budget, the state who stayed behind had to work in dilapidated government was unable to spend the money in a